With a relatively low market cap - when considering eventual potential - and with a technology that could drastically increase the effectiveness of modern day cancer treatments, OncoSec Medical Incorporated (ONCS) may be worth watching as a growth and catalyst play that may still be trading under the speculative radar.

For developmental companies bringing new technologies, procedures and products to market in today's health care climate, a key element to success revolves around cost. Governments, companies and average people are going broke trying to keep up with their healthcare bills and the concerns behind the costs of the sector are literally crippling economies, or threatening to do so.

Therefore, when a company develops a product that is less-intrusive than the current standard-of-care, which translates to "less costly" - or if a new technology can enhance existing treatments by being able to boost the effectiveness of what's already on the market - that could give such a company an immediate leg up in the path towards approval. MRI Interventions (MRIC), for example, has developed an MRI-augmenting medical device that allows surgeons to conduct less-intrusive procedures of the heart and brain while Sunshine Heart (SSH) could also be on to something with its less-intrusive (it does not intrude on the blood stream) implantable device to treat heart failure.

In similar scope, ONCS's proprietary OncoSec Medical System (OMS), OncoSec may have devised a method of delivery for therapies and drugs into cancerous cells that not only meets the ideals listed in the previous paragraph, but could also change the face of the future for how cancer-fighting therapies and drugs are delivered - most notably in regards to skin cancer. Additionally, OncoSec plays into another growing sub sector of cancer treatment - the cancer immunotherapy sector, in which a treatment utilizes a patient's own immune system to fight cancerous cells.

The process behind OMS utilizes one known as electroporation. During this process, electric pulses are applied to open pores in cells that allow them (the cells) to absorb a therapeutic agent and 'trap' it inside the cell walls. This action serves two purposes. First, it allows for a better absorption rate - which makes a therapy that much more effective - and, secondly, it does so without harming the surrounding healthy cells. Those are both key take-aways to note when gauging the possibilities of the future, but one should also note that the technology is still in the Phase II stages of development and has a way to go before meeting market.

OMS has spawned two application paths for which OncoSec is developing, ImmunoPulse and NeoPulse.

ImmunoPulse, not surprisingly as the same says it all, uses the electroporation process to spark a patient's immune system to target cancerous cells itself. According to information published on the OncoSec website, "Initial evidence suggests that this gene therapy has the potential to not only treat cancer cells in the target area, but to also trigger immune responses affecting remote cancer cells outside the direct treatment area including distant lesions."

NeoPulse uses the OMS technology to destroy cancer cells using less harmful doses of bleomycin, a highly effective but also highly toxic anti-cancer drug. The current standard of delivery for this drug - which is highly inefficient - is intravenously. Because of the inefficiency of delivery, side effects are common. Using NeoPulse, however, "to electroporate and directly target cancerous cells with bleomycin, an effective result can be achieved with 1/20th of a traditional chemotherapy dose. In fact, by opening the cell membrane, we can enhance the drug’s ability to kill tumor cells by a factor of as much as 4,000."

As evidenced by the studies complete to date, both applications of OMS have proven safe and successful and their respective developments are worth watching. OncoSec currently has six clinical trials either underway or planned.

ONCS shares have traded down heavily from their 52-week highs, but have leveled off recently in a manner which could be an indication that the worst is in the rear view mirror and the current prices may be an opportune buying time for investors who chose to speculate on the growth potential of the company and its OMS technology.

One cause of the recent share price drop was likely an announcement of results for a Phase III trial testing OMS in the treatment of head and neck cancer. Investors may have been underwhelmed by the fact that treatment only demonstrated "equivalent disease control and survival," rather than improving it. OMS did, however, improve functional outcomes and quality of life for patients, when compared to surgery. Some may not have completely absorbed the information, but these results should be deemed a win for technology, if only for the dollar signs that accompany the outcome.

With all things considered - the expenses and resources dedicated to surgeries - a treatment that is just as effective as surgery, but much less costly will still be considered a win every time. Had the treatment proven to be less effective than surgery, then that could be a different story.

Data from this trial will continue to be monitored for longer-term follow-ups.

With numerous trials underway, key milestones catalysts could quickly evolve, including the summarization and release of actual and interim results from each trial. The company has thus far returned accurate time frames and expectations for the development of its product - always a good sign of validation for a speculative company in the sector - and the very modest market cap, even for a highly speculative company, could mark ONCS as an attractive risk/reward play - and there's always risk in this sector. Investors will have to keep in mind that this technology is still in the earlier stages of development and dilutive financing can always be a possibility.

That said, given the stability of the share price during the past couple of weeks and the pending trial catalysts, ONCS may be positioned well to make a move into the very lucrative market of cancer treatment.

One to keep an eye on.

Disclosure: No position.

Contact VFC's Stock House: vfc@vfcsstockhouse.com

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